The US Securities and Exchange Commission sued NY-based Coinbase, Inc., alleging it has been operating its crypto asset trading platform as an unregistered exchange, broker, and clearing agency, evading the disclosure scheme for securities markets since 2019.  

The SEC also charged the company for failing to register the offer and sale of its crypto asset staking-as-a-service program. The lawsuit alleges that Coinbase’s staking program includes stackable crypto assets, including Solana, Cardano, Polygon and Filecoin, making the staking program an investment contract and therefore a security. 

SEC chief Gary Gensler while addressing the latest Coinbase lawsuit said the crypto exchange allegedly deprived its customers of critical protections that prevent fraud and manipulation, and avoided proper disclosure, and safeguards against conflicts of interest. 

“We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” said SEC Chair Gary Gensler. “Further, as we allege, Coinbase never registered its staking-as-a-service program as required by the securities laws, again depriving investors of critical disclosure and other protections.” 

The lawsuit was filed less than 24 hours after the SEC charged Binance with 13 counts of violating securities laws. 

Hear from industry leaders in alternative assets like Capital Innovations Founder, CEO, CIO, and ADISA President Michael Underhill. Connect with top executives in private credit, real estate and more at the Connect Money: Alternative Assets Conference in Chicago on June 14 at the W City Center.